Teen Driving

Shortly after a teenager earns their first driver’s license, a sad reality sinks in: Car insurance costs are sky-high.

It’s no secret that new drivers in their teens and 20s have the highest rates of insurance. All the major insurance carriers base their rates on risk factors, and statistically, teen drivers are poor drivers.

It’s not an issue of discrimination, but of realization. Insurance agents know that teen drivers are more susceptible to distractions (cell phones, music, other passengers) and that their driving records reflect their inexperience.

But a GPS tracking device, installed in the young driver’s car, could convince an insurance agent otherwise.

Teens can earn lower rates

An insurance company arrives at a rating for an age group based on factors such as type of vehicle, the age of the vehicle, safety features, where the vehicle is stored and the driving record of the primary driver.

Traditionally, an insurer could offer a discount if he was confident that the teen driver was atypical of his age group and is taking steps to reduce his overall risk.

 A simple report card with good grades was an effective method of proof in the past.

Today a growing number of companies are considering ratings factors such as mileage and driving habits. Travel data, recorded by small GPS tracking devices, can be the proof they’re looking for.

GPS tracking records are accurate

Vehicle tracking systems use Global Positioning System (GPS) technology and are known for their accuracy.

The devices receive signals from a constellation of 24 satellites orbiting the earth and the location of the receiver is calculated, usually within a few feet of accuracy.

There are two basic types of GPS tracking devices: passive and active. Both give a complete travel history of the vehicle at intervals of just a few seconds. Data includes the vehicle’s location, direction, frequency of stops, miles traveled and even vehicle speed.

Passive devices are wireless and easily portable. The user downloads the data from memory onto a personal computer via USB port. With active devices, the user can access the tracking information from a remote computer and follow along in real time.

Insurance companies follow parents

Some of the biggest fans of GPS tracking systems are parents who are concerned about their teen’s safety and use the devices to monitor their children’s whereabouts and driving skills. Many let their teens know the systems are installed on the vehicle. Sometimes parents offer to buy the teen driver a car of their own, with the condition that it comes equipped with a vehicle tracking device. Teen drivers can prove responsibility and earn their parents’ trust by demonstrating good driving habits.

It matters to insurance companies

If an active GPS tracking system is installed in a car or truck, the tracking data can be read in real time from a remote location. For that reason, it can help recover a stolen vehicle. Insurance companies have long recognized the value of vehicle tracking devices for this purpose and usually offer substantial savings – some from 10 to 30 percent – on premiums if a GPS tracking device is installed. Nearly a dozen U.S. states have already passed laws mandating insurance discounts for vehicles with anti-theft devices.

Passive devices are compact and can be easily moved from vehicle to vehicle, in cases where the teen driver uses more than one of the family cars. The devices provide information that is equally valuable to insurance companies. GPS tracking systems help control speeding and erratic driving, leading causes of accidents and expensive claims. It can also protect the insured from fraudulent claims by other drivers.

Many insurance companies offer car owners low-mileage discounts. A vehicle tracking system will offer proof of eligibility for that discount. A log of miles driven can also alert the vehicle owner when it is time for routine repairs and replacement of parts. Wear and tear on the vehicle leads to frequent vehicle replacement, which drives up insurance rates.

Another benefit to be considered is the fact that a vehicle tracking system can make a driver more alert. Merely being aware that a GPS system is installed in your car can improve your driving. The psychological affect is similar to seeing a police patrol car driving near you in traffic.

Relief from high insurance costs

Insurance rates are high for teens and other young drivers. But good drivers have fewer moving violations and accidents, and can earn insurance discounts. GPS tracking devices are tools that teach responsibility on the road. They provide valuable information to insurance companies and give parents peace of mind that their children are safe.

The teens and 20s don’t last forever. Just ask an older adult who wishes he or she could relive that age.

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Tags: GPS Tracking, Insurance, Teen Driving

This entry was posted on Thursday, April 16th, 2009 at 11:57 am and is filed under Teen Driving. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.